The present invention relates to a method for electronically processing transactional data and monitoring funds invested in an increasing income financial product.
U.S. Pat. No. 5,864,685 to Hagan discloses an increasing income trust computer transaction system and an insured investment account system. This patent disclosure relates to a certain financial product wherein a subscriber purchases an annuity contract or an irrevocable trust and identifies a primary beneficiary for that contract or trust. The primary beneficiary may be the subscriber or may be another party. Primary beneficiaries having actuarially similar characteristics are grouped together. xe2x80x9cThe trust corpus is funded with the annuity contract principal and/or the annuity contract income of subscribers. Each of the primary beneficiaries (typically the subscribers themselves, but possibly other individuals) receives payments from the trust income. As each subscriber dies, the trust income is distributed to the remaining primary beneficiaries. When the last subscriber dies, the trust corpus is distributed proportionally to secondary beneficiaries, typically the heirs of the primary beneficiaries.xe2x80x9d Col. 3, lines 51-60. Accordingly, the system described in Hagan ""685 utilizes a data processing method which involves determining when the subscriber dies, computing increasing income trust fund payments to surviving subscribers who are grouped together in the same actuarial group as the decedent, and distributing the corpus of the trust, on a prorata basis, to all secondary beneficiaries upon the death of all subscribers in the actuarial group.
U.S. Pat. No.5,631,828 to Hagan discloses a method and a system for processing federally insured annuity and life insurance investments. U.S. Pat. No. 5,291,398 to Hagan discloses a method and a system for processing federally insured annuity and life insurance investments. U.S. Pat. No. 4,752,877 to Roberts et al.; U.S. Pat. No. 4,642,768 to Roberts and U.S. Pat. No. 4,722,055 to Roberts disclose computer systems which monitor financial products. These products fund future events or expenditures. For example, if a person wanted to fund the college education of his or her child, the Roberts system provides a financial product which is monitored and maintained by a computer which collects premium from subscribers, projects the future cost of a college education and invests the premium payments and requests additional premium payments in order to achieve the subscriber""s goal, to wit, to pay for the college. Roberts"" system also discloses the funding of retirement and nursing home expenditures.
None of the aforementioned prior art patents disclose certain important data processing features which establish the viability, growth and continued maintenance of an increasing income financial product.
The present invention responds to administrative problems associated with an increasing income financial product and addresses deficiencies in the prior art. The data processing system and method according to a preferred embodiment of the present invention implements an investment account structure establishing and providing an increasing income financial product.
According to one embodiment of the invention, each subscriber invests in a financial contractual product or program. Each subscriber designates primary and secondary beneficiaries. The subscriber has various payment plan options to fund the financial product. Those plans include (a) lump sum payment, (b) periodic payments, (c) a pledge of a subscriber""s financial asset, and (d) a pledge of a subscriber""s financial asset accompanied with periodic payments. The primary beneficiary is assigned, along with a number of demographically similar beneficiaries, to a certain contract group. In the event the subscriber utilizes the pledge payment plan, when the primary beneficiary dies, the pledged assets of the subscriber are placed under the control of the financial product administrator or its designee. Income is provided according to the contractual terms or parameters to surviving primary beneficiaries of the same assigned contract group on an increasing, survivorship basis until (a) all the initial primary beneficiaries die; or (b) a predetermined percentage of the primary beneficiaries die; (c) the contract expires based upon the expiration of pre-established time periods; or (d) upon any other contractually defined event. Alternatively, the increasing income may be paid to the surviving members based upon mortality tables. When the contract expires, the surviving primary beneficiaries (the percentage initially established per the financial product contract) or the designated secondary beneficiaries receive their pro rata share of the principal from the contract group. In one embodiment, the financial product is configured as a self-directed financial investment wherein the subscriber/primary beneficiary identifies the type of self directed investment structure suitable to him or her and compatible with the designated contract group. The computer system monitors the return on investment (ROI) for the selected, self directed assets, rolls or pours excessive ROI into a supplemental account for the benefit of the subscriber/beneficiary, issues calls for more premiums from the subscriber in the event that the ROI does not meet contract ROI parameters, and otherwise monitors the account.
Thus, it is an object of the present invention to provide a data processing system and method for implementing and administering an investment account structure consisting of increasing income contracts whose commingled principal is invested in any legal investment.
It is a further object of the present invention to provide a data processing system and method for implementing an investment account structure consisting of contracts that pay out increasing income to the survivors (based upon actual mortality or estimated mortality) and whose principal is subsequently distributed to the heirs (or to surviving beneficiaries) upon expiration of the contract.
Another object is that the implementation provides minimum overhead charges and maximum security so that beneficiaries are fully informed regarding the increasing income feature. Therefore, the system provides periodic reports to subscribers or beneficiaries, advising them of their relative progress towards their goals. It also provides reports for system administration and auditing.
A further object of the present invention is to provide a self directed financial product wherein the subscriber, or his or her beneficiary, can select one or more investments or investment strategies and inject his or her investment strategies into the increasing income financial product described herein.
It is an additional object of the present invention to provide various, flexible payment plans for the subscriber to fund the increasing income financial product.
Yet other objects of the invention, its nature, and various advantages will be apparent from the accompanying drawings and the following detailed description of the preferred embodiments of the invention.